Save your cookie preferences

We use cookies to remember your site preferences, record your referrer and improve the performance of our site. For more information, see our cookie policy.

Please select an option below and 'Save' your preferences.

No cookies. Without any cookies our websites can't remember your site preferences (currency, weight units, markets, referrer, etc.) for your next visit. Any cookies already dropped will be deleted at the end of your browsing session.

BullionVault cookies only. We use these cookies to record your site preferences (currency, weight units, markets, referrer, etc.) for your next visit.

BullionVault cookies and third-party cookies. Also, allow our use of cookies from well-known third parties such as Google, Facebook, Bing and YouTube. These help us understand how visitors use our websites so we can improve them.

You can update your cookie preferences at any time from the 'Cookies' link in the footer.

We use cookies (including third-party cookies such as Google) to remember your site preferences and to help us understand how visitors use our sites so we can improve them. To learn more, please see our privacy policy and our cookie policy.

To agree to our use of cookies, click 'Accept' or choose 'Options' to set your preferences by cookie type.

Archive

Gold Falls Amid 'Trade War' Tumult, Silver Back Under $17

Friday, 6/15/2018 14:10

GOLD and SILVER fell Friday lunchtime in London, dropping back to $1289 and $16.95 per ounce respectively as the White House confirmed new tariffs on an extra $50 billion of China's annual exports to the United States.

US-China trade "has been
very unfair, for a very long time," said President Donald Trump, raising import tariffs to 25% on 1,100 different aerospace, robotics and auto-industry goods and spurring analyst and newspaper claims of a full-blown 'trade war'.

Gold priced in Dollars headed for a weekly loss of $9 per ounce while silver trimmed its gain from last Friday's finish to 1.0%.

Having spiked sharply to a 2-month high above $17.30 yesterday, silver faced "near term resistance at $17.18," says technical analysis from French investment bank Societe Generale, pointing to "the descending trend line" running from early 2017.

Australian equities overnight added 1.3% for the day as Tokyo rose, but China led a drop in other major stock markets, with
European-listed shares falling back to show a 1.6% gain for the week amid rumors of Trump's new tariffs on Chinese imports.

"It's been quite a tumultuous year for major geopolitical events, and yet gold has done nothing," said Australian bank Macquarie's precious metals analyst Matthew Turner,
speaking to CNBC today.

With a trading range of just $80 per ounce so far in 2018, "in percentage terms that's the lowest since 1970," Turner added, "back when the gold price was fixed to the Dollar."

On a 1-month basis, volatility in the Dollar gold price last month fell to the record low seen at the end of last year says a note from Yuichi Ikemizu, Tokyo precious metals manager at global bullion bank ICBC Standard Bank.

"Because of this low volatility, fewer investors are in the market so the volatility gets even lower," Ikemizu says, adding that Tokyo gold futures contracts on the Tocom Exchange now offer a huge 70-to-1 leverage for traders because margin payments are based on recent levels of price fluctuation.

Asked what might break gold out of its doldrums, "Gold does well when central bankers are losing control, and right now central banks are tightening into a recovering economy," Turner at Macquarie said today.

But 2019 is widely forecast to see global economic growth slow down, and "over the last 20 years it has been recession that's been good for the gold price, not inflation," he concludes.

Silver meantime "could be in the process of completing the second shoulder of a
massive Inverted Head and Shoulder pattern undergoing since 2013," says the technical note from bullion market-maker Societe Generale.

The inverted H&S – a potentially bullish pattern – would be confirmed by a rise to $18.67 the SG Research team go on, pointing to a level "which also coincides with April 2017 highs and the 61.8% [Fibonacci] retracement of the 2016 to 2017 correction."

Before then, says a technical note from bullion bank Scotia Mocatta's New York office, "New resistance comes in at [this April's high of] $17.36.

Adrian Ash is director of research at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News, RSS links are shown there.